III Accounting for Bonds

Transcription

1 . III Accounting for Bonds This chapter describes accounting procedures for Bond fund activity in CALSTARS. BACKGROUND Bond issues are authorized and governed by statute. When bonds are authorized, the State Treasurer sells bonds. Funds received from bond sales are referred to as bond proceeds. The bond proceeds are available to one or more agencies according to the statute authorizing the sale. Because bonds are usually sold in large blocks (often $100 million or more), the Treasurer invests any excess funds in the Surplus Money Investment Fund (SMIF). The invested funds earn interest, which is either revenue to the General Fund (General Obligation Bonds) or revenue to the fund where the bond proceeds reside. Legislation Prior to October 22, 1987, laws for bonds and bond proceeds were less restrictive than for bonds sold after that date. When the Federal Tax Reform Act of 1986 was enacted, laws regarding the sale of bonds and the period in which funds may be held without interest changed dramatically. These changes and other legislation are discussed below. Pre-Tax Reform Act Bond Proceeds The pre-86 tax laws allow bond proceeds to earn interest for three years with no restrictions. After three years, the majority of the bond proceeds must be spent. If the majority is not spent, interest earned is subject to restrictions. If the majority of the proceeds are spent, the portion remaining can earn interest without restrictions. Post-Tax Reform Act Bond Proceeds The Federal Tax Reform Act of 1986 changed the law for bonds sold after October 22, Interest earned on these bond proceeds became subject to rebate to the Federal government. The State Treasurer adopted new policies for the treatment of Bond funds. When a bond issue has been authorized, the State Treasurer may: Request the benefiting agency to forecast their cash needs; Make short-term loans from the Pooled Money Investment Account (PMIA) at the prevailing rate of interest to pay obligations on a current basis; Periodically market blocks of bonds; and, Direct the proceeds to retire part of the short-term debt incurred. CALSTARS Procedure Manual Transmittal /16/2005 III-1

2 Volume 3, Chapter III Accounting For Bonds SB 1337, Chapter 697, Statutes of 1995 This legislation gave the State Treasurer the ability to issue Commercial Paper notes to provide interim financing. Commercial paper notes are short-term. The maturity date must be within 12 months and shall not occur more than 120 days after the end of the fiscal year in which the commercial paper was issued. Interest rates are typically less than interest rates on long-term bonds or PMIA loans. ACCOUNTING PROCEDURES FOR BONDS The following sections describe how the State Controller's Office (SCO) and CALSTARS account for bonds. SCO Accounts Based on the provisions of the authorizing bond act, the SCO determines how to account for each bond issue. The SCO establishes separate sub-funds for each bond sale to help the State Treasurer s Office track both bond expenditures and revenues. Unless there are restrictions, the SCO typically establishes the following sub-funds. Pre-Tax Reform Act Bond Proceeds Sub-Fund Bond proceeds from the sale of bonds prior to October 22, 1987 are posted to this sub-fund. Transfers to reimburse the expenditure sub-fund are also posted as payments occur. The SCO fund/sub-fund coding convention is nnnn30n. The first four digits are the fund, and the last three digits are the sub-fund. Post-Tax Reform Act Bond Proceeds Sub-Fund Bond proceeds from the sale of bonds on or after October 22, 1987 are posted to this sub-fund, as well as transfers to repay a PMIA loan or to reimburse the expenditure sub-fund. The SCO fund/sub-fund coding convention is nnnn40n. The first four digits are the fund, and the last three digits are the sub-fund. PMIA Loan Proceeds Sub-Fund Loan activity from the Pooled Money Investment Account and Transfers-In/Transfers-Out to other sub-funds are posted to this sub-fund. The SCO fund/sub-fund coding convention is nnnn5nn. The first four digits are the fund, and the last three digits are the sub-fund. The SCO uses the following 2-digit category codes within the PMIA Loan Proceeds Sub-fund and other sub-funds for further classification: Category Description 11 Loan proceeds account 12 Amount transferred from bond/or loan proceeds 13 Income from SMIF/Other (not applicable to General Obligation bonds) 14 Expenditure reimbursements 18 Reservation-loan amount CALSTARS Procedure Manual Transmittal /16/2005 III-2

3 Volume 3, Chapter III Accounting For Bonds The Category codes above are sometimes used in other types of sub-funds, but may have different titles. The title(s) is determined by the type of sub-fund it resides in. Because the 2-digit SCO Category codes are not standard UCM accounts, they are identified in CALSTARS by the 2-digit Account Type in the AS Table. PMIA Loan Proceeds Sub-Fund (Eligible For Commercial Paper) The State Treasurer issues Commercial Paper periodically to pay down the loan amount. When this occurs, loan activity from the PMIA posts to this sub-fund. Transfers-In and Transfers-Out to other sub-funds are also posted to this sub-fund. The SCO fund/sub-fund coding convention is nnnn7nn. The first four digits are the fund, and the last three digits are the sub-fund. The same category codes identified above for the PMIA Loan Proceeds Sub-fund also apply to this sub-fund. Upfront Bond Sales Proceeds Sub-Fund Bond proceeds from the sale of construction bonds, in the absence of a PMIA loan and/or in excess of a PMIA loan repayment, are posted to this sub-fund. Transfers to reimburse the expenditure sub-fund are also posted as payments occur. Upfront bond sales proceeds are sometimes used to repay PMIA loans. The SCO fund/sub-fund coding convention is nnnn33n. The first four digits are the fund, and the last three digits are the sub-fund. The SCO Category codes used within this sub-fund are: Category Description 11 Transfer to bond expenditures - construction 12 Transfer to bond expenditures - non-construction 13 Income from SMIF (not applicable to General Obligation bonds) 15 Transfer to loan proceeds account 17 Interest earnings of locals 18 Reservation-bond proceeds 19 Condemnation (Fund 0910) earnings Taxable Bond Sale Proceeds Sub-Fund Bond proceeds derived from the sale of bonds that are not tax exempt, including any upfront bond sale proceeds, are posted to this sub-fund. The SCO fund/sub-fund coding convention is nnnn60n. The first four digits are the fund, and the last three digits are the sub-fund. Bond Expenditures Sub-Fund Encumbrances, liabilities and expenditures, as well as the transfers and reimbursements that fund them, post to this sub-fund. All Bond funds have an Expenditure sub-fund. Typically there is only one Expenditure sub-fund per fund, regardless of how many sub-funds for bond and loan proceeds exist within the fund. The SCO fund/sub-fund coding convention is nnnn00n. The first four digits are the fund, and the last three digits are the sub-fund. CALSTARS Procedure Manual Transmittal /16/2005 III-3

4 Volume 3, Chapter III Accounting For Bonds CALSTARS Activities The following sections provide instructions for recording bond accounting activity. However, due to the diversity of the statutes that govern the bonds, every possible accounting event may not be included. Agencies should work directly with the SCO to ensure that their CALSTARS account structure is as close to the SCO's account structure as possible. ESTABLISHING TABLES The following tables are established in CALSTARS for bond accounting activity. Refer to Volume 2, Chapter IV, Table Maintenance, for more information. DT 23-Fund Detail A unique Fund Detail number must be established in CALSTARS for each sub-fund established by SCO. Since SCO's sub-fund numbers are three digits and the CALSTARS' Fund Detail field is two digits, agencies must establish a two-digit convention for each three-digit SCO sub-fund. Agencies must also manually change the two-digit Fund Detail number to the three digit SCO number prior to submitting documents to the SCO, e.g., claim schedules, financial statements. Note: When establishing a Fund Detail, the Appropriation Fund Level Indicator must be 1. If not, accounting transactions cannot be recorded and reported at Fund Detail level. DT 32-Subsidiary Establish Subsidiaries for the following GLs, if needed: GL 1400-Due From Other Funds GL 3110-Due To Other Funds GL 9811 Operating Transfers In GL 9812 Operating Transfers Out Refer to Volume 1, Chapter V, and Volume 2, Chapter IV-DT, for information on establishing a Subsidiary. The Subsidiary is nnnn0000, where nnnn is the 4-digit UCM fund number of the fund from which monies are transferred to or from. D33-Source (Statewide Table) Source codes are required for Bond entries that post to the following GL accounts: CALSTARS Procedure Manual Transmittal /16/2005 III-4

5 Volume 3, Chapter III Accounting For Bonds GL 8000-Revenue GL 9811-Operating Transfers In GL 9830-Other Sources, GL 9000-Expenditures (Abatement transactions) Source codes are established by CALSTARS in accordance with the Uniform Codes Manual (UCM). To request the addition of a Source code to the D33 table, call the CALSTARS Hotline at (916) (CNET ) or the request to Refer to the UCM or Volume 2, Chapter IV-DT for more information. Appropriation Symbol Table A unique Appropriation Symbol (AS) must be established for each combination of SCO fund, sub-fund, and category. Like other types of appropriations, a minimum of one Appropriation Symbol number should be established for each SCO detail account. When establishing Appropriation Symbol records, the CALSTARS Account Type should be the same as the SCO Category. If the SCO Category is blank, use the chart below to determine the CALSTARS Account Type. Refer to Volume 2, Chapter IV-AS, for more information. If SCO Category is: Blank For SCO Account Type: D (Disbursement) or T (Transfers-out) CALSTARS Account Type is: Blank R (Revenue and Transfers-in) RR 00 PA Table At least one Program Cost Account (PCA) must be established for each AS Table record. For PCAs that record transfers, reimbursement, or revenue activity, the Disbursement Fund Segment is coded the same as the Fund Split Distribution Segment on the PA Table. To record support expenditure activity, the Disbursement Fund Segment may be coded differently than the Fund Split Distribution Segment if a Clearing Account or Working Capital Account is used. Refer to Volume 2, Chapter IV-PA, for more information. Other Tables Other table entries (e.g., Index Code, Project Control) may be established to identify bond fund activity. For example, an Index Code may be established to identify specific bond activity. CALSTARS Procedure Manual Transmittal /16/2005 III-5

6 Volume 3, Chapter III Accounting For Bonds RECONCILIATION Monthly account reconciliations between the SCO and CALSTARS must be performed using the SCO Agency Reconciliation Report and the CALSTARS DB2 and H02 or DB1 and HB4 (requested by Fund Detail) reports. An additional General Ledger reconciliation must be performed for non-shared funds. The SCO Fund Reconciliation Report and the G01 (requested at Fund level) is used for this reconciliation. Differences may be investigated by looking at the H02 or HG1 reports. For more information about these monthly reconciliations, refer to Volume III, Chapter VII. YEAR-END REPORTING A complete set of financial statements for each sub-fund must be prepared at year-end. However, differences in GL 1140 between SCO and the agency for non-shared bond funds are identified on Report No. 3, Adjustments to Controller's Accounts. The report is submitted at fund level; therefore, only one Report 3 is submitted for all sub-funds. In addition to a complete set of financial statements for each sub-fund, agencies must request and submit a G02, Pre-Closing Trial Balance and Post-Closing Trial Balance at fund level ( ). The Q26 Report (Report No. 4 - Year-end Statement of Revenue) does not display receipts for GL 9830-Other Sources. Receipts for GL 9830 should not be added to Report No. 4. ACCOUNTING EVENTS The following exhibits display common accounting events in two categories. Bond accounting activity that does not have a corresponding PMIA loan is displayed in Exhibit III-1. Bond accounting activity that has a corresponding PMIA loan is displayed in Exhibit III-2. A flow chart, a listing of transaction codes/journal entries and their explanations, and T accounts are included in each exhibit. The accounting events and corresponding CALSTARS transaction codes are listed in the order they normally occur. If your agency receives a SCO Journal Entry that is not described in these procedures, please contact the CALSTARS Hotline for help. CALSTARS Procedure Manual Transmittal /16/2005 III-6

8 EXHIBIT III-1 (CONTINUED) BOND FUND ACCOUNTING ACTIVITIES - NO PMIA LOAN Record authorization of bonds (voter approval) in the bond proceeds sub-fund: 1 Record the authorization: TC B01 - Bond Act is Chaptered Dr Bonds Authorized-Unissued Cr Provision for Unissued Authorized Securities Record an adjustment to the original authorized amount in the bond proceeds sub-fund: Optional. Agencies may record this information in their accounting records. 2A 2B 3A 3B 3C Record an increase to the original authorized amount: TC B10 - Bond Act Adjustment to Increase Dr Bonds Authorized-Unissued Cr Provision for Unissued Authorized Securities Record a decrease to the original authorized amount: TC B11 - Bond Act Adjustment to Decrease Dr Provision for Unissued Authorized Securities Cr Bonds Authorized-Unissued Record the Sale of Bonds in the bond proceeds sub-fund: Record reduction of bonds authorized when bonds are sold: TC B07 - Reduce Bonds Authorized When Sell Bonds Dr Provision for Unissued Authorized Securities Cr Bonds Authorized-Unissued Record an original appropriation: TC Record an Original Appropriation Dr Appropriations-Offset Cr Appropriations Record receipt of monies from bond sale: (1) TC Record SCO Collection of Other Sources Cr Other Sources (2) TC B08 - Accrue Premium/Interest on G. O. Bond Cr Due to Other Funds or Appropriations (3) TC B08 - Accrue Premium/Interest on G. O. Bond Cr Due to Other Funds or Appropriations Optional. This entry is used only if Entry #1 was done. Optional. This entry is used only if Entry #1 was done. Optional. This entry is used only if Entry #1 was done. The SCO posts this as: Dr Fund Balance-Appropriated Cr Appropriations Use Source This entry is for the par value of the bond. The SCO may use GL 9839 instead of GL This entry is for the premium received on the bond sale that will be transferred to the General Fund. This entry is for the accrued interest purchased at the time of sale that will be transferred to the General Fund. CALSTARS Procedure Manual Transmittal /16/2005 III-8

9 4A 4B EXHIBIT III-1 (CONTINUED) BOND FUND ACCOUNTING ACTIVITIES - NO PMIA LOAN Record transfer of Premium and Interest recorded in Entries 3C(2) and 3C(3) to General Fund in the bond proceeds sub-fund: Record the premium received on the bond sale transferred to the General Fund: TC B09 - Transfer Premium/Interest on G. O. Bond Dr Due to Other Funds or Appropriations Record accrued interest received on the bond sale transferred to the General Fund: TC B09 - Transfer Premium/Interest on G. O. Bond Dr Due to Other Funds or Appropriations Optional. This entry is used only if Entry #1 was done. Optional. This entry is used only if Entry #1 was done. Record Appropriation Expenditure authority based on Budget Act or statute in the bond expenditure sub-fund: 5 Record an original appropriation: TC Record an Original Appropriation Dr Appropriations-Offset Cr Appropriations Record Encumbrances for future Expenditures in the bond expenditure sub-fund: 6 Record an original encumbrance: TC Record an Original Encumbrance Dr Encumbrances Cr Encumbrances - Offset 7A NOTE: The SCO records entries 7 and 8 simultaneously. Entries to record year-end expenditure accruals may be needed. Refer to Volume 7 for the appropriate TCs. Record Expenditures in the bond expenditure sub-fund: Entries for disbursements applicable to year-end expenditure accruals may be needed. Refer to Volume 7 for appropriate TCs. Claim schedule is submitted for payment of encumbered expenditures: TC Record Auto Scheduling Expend Prev Encumbered -OR- TC Record Manual Scheduling of Exp Prev Encumbered Dr Appropriation Expenditures Cr Claims in Process Dr Encumbrances - Offset Cr Encumbrances Use current procedures to record claims filed, claims paid and claim correction entries. CALSTARS Procedure Manual Transmittal /16/2005 III-9

10 EXHIBIT III-1 (CONTINUED) BOND FUND ACCOUNTING ACTIVITIES - NO PMIA LOAN 7B 7C 7D Claim schedule is submitted for payment of expenditures (no encumbrance): TC Record Auto Sched Exp Not Prev Encumb or Accrued -OR- TC Record Manual Sched of Exp Not Prev Enc or Accrued Dr Appropriation Expenditures Cr Claims in Process Direct payment by SCO of encumbered expenditures: TC Record SCO Pay of Expenditure Prev Encumbered Dr Appropriation Expenditures Dr Encumbrances - Offset Cr Encumbrances Direct payment by SCO of expenditures (no encumbrance): TC Record Direct SCO Pay of Exp Not Prev Enc or Accrued Dr Appropriation Expenditures Record transfer of money for Expenditures recorded in Entry 7: Use current procedures to record claims filed, claims paid and claim correction entries. Use current procedures to record claims filed, claims paid and claim correction entries. Use current procedures to record claims filed, claims paid and claim correction entries. 8A 8B Record Operating Transfers Out in the bond proceeds sub-fund: TC 481 Record Operating Transfers Out Dr Operating Transfers Out Record cash received (from Operating Transfers In or Reimbursements) for expenditures incurred in the bond expenditures sub-fund: TC Record Operating Transfers In Cr Operating Transfers In Or TC 118 Record Reimbursements Cr Reimbursements Use Object Detail 626. This entry is posted from the SCO journal entry. Use Subsidiary nnnn0000, where nnnn identifies the transferee fund to receive the transfer. Use TC 483. Use Source 3nnnn0. This entry is posted from the SCO's journal entry. Use Subsidiary nnnn0000, where nnnn identifies the transferor fund. Use TC 118. Use Source SCO will normally use Category 92 to separate reimbursements for bond funds from regular appropriation reimbursements in Category 90. If SCO sets up a budget for the reimbursement, use TC 020 to record. CALSTARS Procedure Manual Transmittal /16/2005 III-10

11 EXHIBIT III-1 (CONTINUED) BOND FUND ACCOUNTING ACTIVITIES - NO PMIA LOAN 9A 9B 9C Record abatement of Expenditures: If SCO collection: If appropriation is reverted, record receipt of monies and return of Operating Transfers In to the bond expenditures sub-fund: (1) TC Record SCO Receipt for Reverted Appropriation Cr Refund to Reverted Appropriations` AND (2) TC Record Return of Operating Transfers In Dr Operating Transfers In OR If agency collection: (3) TC Record Cash Receipts as Refund to Reverted Appropriation Dr General Cash Cr Refunds To Reverted Appropriations If appropriation is not reverted, record receipt of monies and return of Operating Transfers In in the bond expenditures sub-fund: (1) TC Record SCO Collection of Abatements Cr Appropriation Expenditures AND (2) TC Record return of Operating Transfers In Dr Operating Transfers In Record return of Operating Transfers Out (appropriation is open or reverted) in the bond proceeds sub-fund: TC Record Return of Operating Transfers Out Cr Operating Transfers Out Use Source If agency collection, enter: TC Record Cash Receipts as Refund to Reverted Appropriation Use current procedures for Cash in Transit and Cash in State Treasury entries. Entry (2) is not made until the Remittance Advice is recorded at the SCO and a journal entry is issued showing the transfer. Use Source 3nnnnn, the same as used in Entry #8B. Use Subsidiary nnnn0000, where nnnn identifies the transferor fund making the transfer. Use Source Use Source 58nnnn. If agency collection, enter: TC Record Cash Receipts as Expend Abate (Not Billed) Use current procedures for Cash in Transit and Cash in State Treasury entries. Entry (2) is not made until the Remittance Advice is recorded at the SCO and a journal entry is issued showing the transfer. Use Source 3nnnnn, the same as used in Entry #8B. Use Subsidiary nnnn0000, where nnnn identifies the transferor fund making the transfer. Use Object Detail 626. Use Subsidiary nnnn0000, where nnnn identifies the transferee fund to receive the transfer. CALSTARS Procedure Manual Transmittal /16/2005 III-11

12 EXHIBIT III-1 (CONTINUED) BOND FUND ACCOUNTING ACTIVITIES - NO PMIA LOAN Record accrued SMIF Interest earnings on June 30th in the bond proceeds sub-fund: 10 Record accrued SMIF interest earned: TC Record Amount Due From Other Funds - Revenue Dr Due From Other Funds or Appropriations (SMIF) Cr Revenue Use Source SCO may use Source Record collection of SMIF Interest earnings on bonds in bond proceeds sub-fund: 11 A 11 B If interest was accrued: TC SCO Receipt of Due From Other Funds - Revenue Cr Due From Other Funds or Appropriations (SMIF) If interest was not accrued: TC Record SCO Collection of Revenue (Not Billed) Cr Revenue Use Source SCO may use Source Use Source SCO may use Source CALSTARS Procedure Manual Transmittal /16/2005 III-12

16 Record authorization of bonds (voter approval) in the bond proceeds sub-fund: 1 Record bond authorization: TC B01 - Bond Act is Chaptered Dr Bonds Authorized-Unissued Cr Provision for Unissued Authorized Securities Optional. Agencies may record this information in their accounting records. Record an adjustment to the original authorized amount in the bond proceeds sub-fund: 2A 2B Record an increase to the original authorized amount: TC B10 - Bond Act Adjustment to Increase Dr Bonds Authorized-Unissued Cr Provision for Unissued Authorized Securities Record a decrease to the original authorized amount: TC B11 - Bond Act Adjustment to Decrease Dr Provision for Unissued Authorized Securities Cr Bonds Authorized-Unissued Record PMIA loan in PMIA loan proceeds sub-fund: Optional. This entry is used only if Entry #1 was done. Optional. This entry is used only if Entry #1 was done. 3A 3B Record receipt of PMIA loan: TC B02 - Record receipt of PMIA Loan Cr PMIA Loans Payable Record an original appropriation: TC Record an Original Appropriation Dr Appropriations-Offset Cr Appropriations Use Object Detail 626. If this loan is to replace an existing PMIA loan, refer to Entry #12. If this loan is to replace an existing PMIA loan, refer to Entry #12. Record appropriation expenditure authority based on Budget Act or statute. Entries are in bond expenditure sub-fund: 4 Record original appropriation: TC Record an Original Appropriation Dr Appropriations-Offset Cr Appropriations CALSTARS Procedure Manual Transmittal /16/2005 III-16

18 Record transfer of money to cover expenditures recorded in Entry #6: If a Claim Correction is received from the SCO, a reversal of each entry is needed. 7A 7B 8A Record Operating Transfers Out in the bond proceeds sub-fund: TC Record Operating Transfers Out Dr Operating Transfers Out Record cash received (from Operating Transfers In or Reimbursements) to cover expenditures incurred in the bond expenditures sub-fund: TC Record Operating Transfers In Cr Operating Transfers In Or TC 118 Record Reimbursements Cr Reimbursements Record abatement of expenditures: If SCO collection: If appropriation is reverted, record receipt of monies and return of Operating Transfers In to the bond expenditures sub-fund: (1) TC Record SCO Receipt for Reverted Appropriation Cr Refund to Reverted Appropriations AND (2) TC Record return of Operating Transfers In Dr Operating Transfers In OR If agency collection: (3) TC Record Cash Receipts as Refund to Reverted Appropriation Dr General Cash Cr Refunds To Reverted Appropriations Use Object Detail 626. This entry is posted from the SCO journal entry. Use Subsidiary nnnn0000, where nnnn identifies the transferee fund to receive the transfer. Use TC 483. Use Source 3nnnn0. This entry is posted from the SCO's journal entry. Use Subsidiary nnnn0000, where nnnn identifies the transferor fund. Use TC 118. Use Source SCO will normally use Category 92 to separate reimbursements to bond funds from regular appropriation reimbursements in Category 90. If SCO sets up a budget for the reimbursement, use TC 020 to record. Entry (2) is not made until the Remittance Advice is recorded at the SCO and a journal entry is issued showing the transfer. Use Source 3nnnnn, the same as used in Entry #7B. Use Subsidiary nnnn0000, where nnnn identifies the transferor fund making the transfer. Use Source Use current procedures for Cash in Transit and Cash in State Treasury entries. CALSTARS Procedure Manual Transmittal /16/2005 III-18

19 8B 8C If SCO collection: If appropriation is not reverted, record receipt of monies and return of Operating Transfers In in the bond expenditures sub-fund: (1) TC Record SCO Collection of Abatements Cr Appropriation Expenditures AND (2) TC Record Return of Operating Transfers In Dr Operating Transfers In OR If agency collection: (3) TC Record Cash Receipts as Expend Abate (Not Billed) Dr General Cash Cr Appropriation Expenditures Record return of Operating Transfers Out (appropriation is open or reverted) if PMIA Loan has not been repaid in the PMIA Loan Proceeds Sub-Fund (OR record in the Bond Proceeds Sub-Fund if the loan has been repaid and Entry #13 has been done): TC Record Return of Operating Transfers Out Cr Operating Transfers Out Record accrued interest due on PMIA loan on June 30th in the bond expenditures sub-fund: This entry is not reversed in the new year. Entry (2) is not made until the Remittance Advice is recorded at the SCO and a journal entry is issued showing the transfer. Use Source 3nnnnn, the same as used in Entry #7B. Use Subsidiary nnnn0000, where nnnn identifies the transferor fund making the transfer. Use Source 58nnnn. Use current procedures for Cash in Transit and Cash in State Treasury entries. Use Object Detail 626. Use Subsidiary nnnn0000, where nnnn identifies the transferee fund to receive the transfer. 9 Record accrued interest due on PMIA loan: TC Record Accrued Exp and Amount Due to Other Funds Dr Appropriation Expenditures Cr Due to Other Funds or Appropriations Use Object Detail 602. This entry is only done for Revenue and selfliquidating General Obligation bonds. CALSTARS Procedure Manual Transmittal /16/2005 III-19

20 10A 10B Record payoff of prior PMIA Loan with new PMIA Loan: Record receipt in PMIA loan proceeds sub-fund (new): (1) TC B02 - Record receipt of PMIA Loan (Use Object Detail 626) Cr PMIA Loans Payable (2) TC Record Operating Transfers Out Dr Operating Transfers Out (3) TC Record an Original Appropriation Dr Appropriations-Offset Cr Appropriations Record payoff in PMIA loan proceeds sub-fund (old): (1) TC Record Operating Transfers In Cr Operating Transfers In (2) TC B04 - Record Payoff of PMIA Loan Dr PMIA Loans Payable (3) TC Record Operating Transfers Out Dr Operating Transfers Out (4) TC 010 R - Record an Original Appropriation (Reversal) Dr Appropriations Cr Appropriations-Offset The transfer includes the amount needed to pay off interest due on old loan. The SCO posts this as: Dr Fund Balance-Appropriated Cr Appropriations Use Subsidiary nnnn0000, where nnnn identifies the transferee fund to receive the transfer. This entry includes the amount to repay the principal and interest due on the old PMIA loan. Use Source 3nnnnn. Use Subsidiary nnnn0000, where nnnn identifies the transferor fund making the transfer. This entry is for the amount of interest due on the old PMIA loan. Use Subsidiary nnnn0000, where nnnn identifies the transferee fund to receive the transfer. This entry offsets the amount recorded in Entry (3B). CALSTARS Procedure Manual Transmittal /16/2005 III-20

21 10 C Record interest due on PMIA loan (old) in bond expenditures subfund: (Interest on General Obligation bonds that are not self-liquidating is paid by the General Fund.) (1) TC Record Operating Transfers In Cr Operating Transfers In AND If not accrued: (2) TC B05 - SCO Payment of Interest Payable on PMIA Loan Dr Appropriation Expenditures OR If accrued: (3) TC 262 Record SCO Pay of Exp Prev Accrued as Due to Other Funds Dr Due to Other Funds or Appropriations Use Subsidiary nnnn0000, where nnnn identifies the transferor fund making the transfer. 11A 11B 11 C Record the sale of bonds in the bond proceeds sub-fund: Record reduction of bonds authorized when bonds are sold: TC B07 - Reduce Bonds Authorized When Sell Bonds Dr Provision for Unissued Authorized Securities Cr Bonds Authorized-Unissued Record an original appropriation: TC Record an Original Appropriation Dr Appropriations-Offset Cr Appropriations Record receipt of monies from bond sale: (1) TC Record SCO Collection of Other Sources Cr Other Sources (2) TC B08 - Accrue Premium/Interest on G. O. Bond Cr Due to Other Funds or Appropriations Optional. This entry is used only if Entry #1 was done. The SCO records this appropriation setup by: Dr Fund Balance-Appropriated Cr Appropriations Use Source This entry is for the par value of the bond. SCO may use GL 9839 instead of GL This entry is for the premium received on the bond sale that will be transferred to the General Fund. CALSTARS Procedure Manual Transmittal /16/2005 III-21

22 12A 12B 13A 13B (3) TC B08 - Accrue Premium/Interest on G. O. Bond Cr Due to Other Funds or Appropriations This entry is for the accrued interest purchased at the time of sale that will be transferred to the General Fund. Record transfer of premium and interest (recorded in Entries 11C and 11D) to General Fund in the bond proceeds sub-fund: Record the premium received on the bond sale that was transferred to the General Fund: TC B09 - Transfer Premium/Interest on G. O. Bond Dr Due to Other Funds or Appropriations Record the accrued interest received on the bond sale that was transferred to the General Fund: TC B09 - Transfer Premium/Interest on G. O. Bond Dr Due to Other Funds or Appropriations Record repayment of PMIA loan - principal only (after bond sale): Entry for the bond proceeds sub-fund: TC Record Operating Transfers Out Dr Operating Transfers Out Entries for the PMIA loan proceeds sub-fund: (1) TC Record Operating Transfers In Cr Operating Transfers In (2) TC B04 - Record Payoff of PMIA Loan Dr PMIA Loans Payable (3) TC 010 R - Record an Original Appropriation (Reversal) Dr Appropriations Cr Appropriations-Offset Optional. This entry is used only if Entry #1 was done. Optional. This entry is used only if Entry #1 was done. Use Object Detail 626. Use Subsidiary nnnn0000, where nnnn identifies the transferee fund to receive the transfer. Use Source 3nnnnn. Use Subsidiary nnnn0000, where nnnn identifies the transferor fund making the transfer. Use Object Detail 626. CALSTARS Procedure Manual Transmittal /16/2005 III-22

23 14A 14B Record payment of interest due on PMIA loan (after bond sale): (Entries done for Revenue and General Obligation bonds that are self-liquidating.) Entry for the bond proceeds sub-fund: TC Record Operating Transfers Out Dr Operating Transfers Out Entries for the bond expenditures sub-fund: (1) TC Record Operating Transfers In Cr Operating Transfers In AND If not accrued: (2) TC B05 - SCO Payment of Interest Payable on PMIA Loan Dr Appropriation Expenditures OR If accrued: (3) TC Record SCO Pay of Exp Prev Accrued as Due to Other Funds Dr Due to Other Funds or Appropriations Use Subsidiary nnnn0000, where nnnn identifies the transferee fund to receive the transfer. Use Source 3nnnnn. Use Subsidiary nnnn0000, where nnnn identifies the transferor fund making the transfer. Use Object Detail 626. Record accrued SMIF interest earnings on June 30th in the bond proceeds sub-fund: This is interest from investments in either the bond proceeds sub-fund or the PMIA loan proceeds sub-fund. 15 Record accrued SMIF interest earnings: TC Record Amount Due From Other Funds - Revenue Dr Due From Other Funds or Appropriations (SMIF) Cr Revenue Use Source SCO may use Source Record collection of SMIF interest earnings on bonds in bond proceeds sub-fund: This is interest from investments in either the bond proceeds sub-fund or the PMIA loan proceeds sub-fund. 16A If interest earnings were accrued (Entry #15): TC SCO Receipt of Due From Other Funds - Revenue Cr Due From Other Funds or Appropriations (SMIF) Use Source SCO may use Source CALSTARS Procedure Manual Transmittal /16/2005 III-23

24 16B Entry if interest has not been accrued: TC Record SCO Collection of Revenue (Not Billed) Cr Revenue Use Source SCO may use Source Entries to record the pay down of a PMIA loan with Commercial Paper in the PMIA loan proceeds sub-fund (7nn): 17A Record pay down of PMIA loan: TC B04 - Record Payoff of PMIA Loan Dr PMIA Loans Payable 17B Reduce current year expenditures being reimbursed by Commercial Paper: 17 C 17 D (1) TC Record Operating Transfers Out (Category 14) Dr Operating Transfers Out AND (2) TC Record Return of Operating Transfers Out (Category 11) Cr Operating Transfers Out Record transfer of cash from the Unallocated G.O. Bond Commercial Paper Fund (0656) to the PMIA loan proceeds subfund (7nn): TC Record Operating Transfers In Cr Operating Transfers In Record appropriation adjustment for Commercial Paper: (1) TC 010 R - Record an Original Appropriation (Category 11) Dr Appropriations Cr Appropriations-Offset AND (2) TC Record an Original Appropriation (Category 14) Dr Appropriations-Offset Cr Appropriations Use Object Detail 626. Use Object Detail 626. Use Subsidiary nnnn0000, where nnnn identifies the transferee fund to receive the transfer. Use Object Detail 626. Use Subsidiary nnnn0000, where nnnn identifies the transferee fund to receive the transfer. Use Source Use Subsidiary nnnn0000, where nnnn identifies the transferor fund making the transfer. CALSTARS Procedure Manual Transmittal /16/2005 III-24

. IV Accounting for Interfund Loans This chapter describes the accounting procedures for interfund loans in CALSTARS. An interfund loan may be defined as when a fund lends money to another fund. Accounting

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